As far as hills and smoother elevation changes go, the biggest problem is the display.
There can be multiple biomes on one map, yeah. There's no need to keep the animals out of the other adjacent biome squares, although they could check if it starts looking too strange.
The inside features are definitely going to be different. The end game will probably be tossed in some fortresses for now, to be replaced by whatever.
Right now, the entire map is assumed to be level, more or less, except for the magic channels that stop things from flowing beyond them. The outdoor river used to be 'downhill' from the mountain, but that code, which didn't work in the first place, has now been removed. Outdoor farming is fine, though adversaries should exploit the opening. So the magma isn't 'downward', just deeper (horizontally) in the mountain. Now, this wasn't really the idea, it's just supposed to be whatever it is without strictly catering to geometry and physics. Doing fluid dynamics over a 480x480 map isn't possibly in real time at this point. It will be even less possible when a Z coord is added, but at least it'll be more clear where up and down are.
Also keep in mind that if the same Z range is permitted in dwarf mode that exists in adventure mode, and you dig widely enough to allocate all of the blocks in the 480x480x31 map, there will be serious performance and even memory issues.